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House Leaders Unveil Health Bill

House Speaker Nancy Pelosi listened to House Majority Leader Steny Hoyer during a health-care news conference on Capitol Hill on Thursday.
Associated Press

By

Janet Adamy

Updated Oct. 30, 2009 12:01 a.m. ET

WASHINGTON -- House leaders unveiled their sweeping health bill Thursday, ending months of negotiations to bring together fractious Democrats and setting the stage for the full House to take up the bill next week.

What Happens Next

Next week: House leaders' target date to take up a bill introduced Thursday.

Early November: Senate Majority Leader Harry Reid aims to unveil bill to bring to Senate floor. Must get 60 votes to open debate.

November and perhaps beyond: Senate debates health bill. Must get 60 votes again to end debate.

Date uncertain: If full Senate and House both pass bills, they hold conference committee to work out differences.

End of year: President Barack Obama's target date to sign a bill.

The Congressional Budget Office estimated that the legislation will spend $1.055 trillion, largely to expand health insurance, which would be more than offset by tax increases and spending cuts. The revised legislation would extend insurance coverage to 36 million Americans and create a new government health-insurance program to compete with private insurance companies.

House Democrats said the 1,990-page bill was a historic step toward universal health insurance. "We come before you to follow in the footsteps of those who gave our country Social Security and then Medicare," House Speaker Nancy Pelosi said.

Republicans, meanwhile, said the bill would create new bureaucracies without fixing the health system. "It's going to raise the cost of American health insurance," said House Minority Leader John Boehner of Ohio.

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No Republicans are expected to vote for the bill. While liberals praised the measure, key blocs of House Democrats haven't offered their endorsement. The fiscally conservative Blue Dog coalition said Thursday that it wants more proof that the bill lowers federal health spending in the long term.

Doctors complained that lawmakers removed a provision that staved off deep cuts to physicians' Medicare payments. Hospitals fretted the new public plan would underpay them, despite increases in reimbursement rates.

The sharpest criticism came from employers, who say it will saddle them with higher taxes, and insurance companies, which say a new public insurance plan will drive them out of business.

"We are not supportive of this bill in its current form," said
Karen Ignagni,
president of America's Health Insurance Plans, the main industry trade group. "We think there is a missed opportunity on comprehensive cost containment."

House Minority Leader John Boehner of Ohio speaks Thursday behind a copy of House Democrats' health bill.
Getty Images

This version of the overhaul came after three House committees passed separate drafts over the summer. Lawmakers have for weeks been wrestling over a compromise measure.

The CBO said Thursday that it estimates the net cost of the bill at $894 billion over a decade. By that measure, it is just under the $900 billion ceiling set by President Barack Obama. He called the bill a "critical milestone" and said he was pleased it carried a public option.

The CBO raised questions about whether the public plan will save consumers money. In a letter to House leaders, CBO Director Douglas Elmendorf wrote that the plan "would typically have premiums that are somewhat higher" than those of private insurance plans offered alongside it.

The CBO estimated that new taxes and spending cuts in the bill would lower the federal deficit by $104 billion as of 2019. Expected savings diminished in the final years of the budget projection, prompting opponents to say the bill doesn't lower health costs over the long term. The CBO said it expected savings to outpace new spending but couldn't be sure.

Comparing the Plans

How the House and Senate bills line up:

Public Option

House: Creates government-run health-insurance plan that would negotiate rates with doctors and hospitals.

Senate: Same except states would have right to opt out.

Winners/Losers: Doctors likely to get higher payments than they would if public plan rates were tied to Medicare. Insurers could lose because they'll face a new competitor

Employer Mandate

House: Employers must provide health-insurance coverage or pay fine of 8% of payroll (for those with payroll greater than $750,000).

Senate: Penalty for employers who don't provide coverage is up to $750 per employee, if employees get government subsidies.

Winners/Losers: Employers generally fare better under Senate plan.

Taxes

House: Surtax of 5.4% on married couples earning more than $1 million a year or individuals making more than $500,000 a year.

Senate: No surtax on the wealthy. Tax on certain high-value health-insurance plans.

Winners/Losers: Unions prefer the House bill because some union members have high-value or "Cadillac" health plans.

Individual Mandate

House: Those who go without insurance would pay fine of up to 2.5% of adjusted gross income.

Senate: Finance Committee bill would levy fines of up to $1,500 per family if people refuse to purchase health insurance.

Winners/Losers: Lower-income people get subsidies to buy coverage. Those who feel they still can't afford health insurance would lose, because they have to pay a fine.

The bill spends $425 billion over a decade to expand Medicaid and the Children's Health Insurance Program, and $605 billion for subsidies to low- and middle-income Americans to buy health insurance on government-run insurance exchanges. It cuts spending for Medicare and other federal health programs by $426 billion over a decade.

The bill requires most Americans to have health insurance by 2013, with fines as much as 2.5% of income if they don't. It would leave 96% of legal U.S. residents with health insurance by 2019, up from 83% today.

Lawmakers changed the bill to provide Medicaid to a greater swath of the poor, while slightly narrowing the scope of new subsidies for health insurance to middle-income Americans. A family of four earning up to $33,000 a year will be eligible for the federal-state Medicaid program. A family of four earning up to $88,000 a year would pay no more than 12% of their income for health insurance, with the government subsidizing premiums if they exceed that level.

The bill imposes a 5.4% surtax on people earning more than $500,000 a year and families earning more than $1 million a year.

Employers that don't offer health insurance face fines equal to 2% of their payroll in companies with minimum annual payrolls of $500,000 a year. The fines increase to 8% of payroll for employers whose annual payroll exceeds $750,000. Firms with a payroll of less than $500,000 would be exempt.

House Democrats added a provision that revokes a decades-old antitrust exemption for insurance companies.

As expected, the bill prevents insurers from denying coverage to people with a pre-existing health condition or dropping coverage when customers get sick. It places caps on patients' out-of-pocket medical costs and waives co-pays for preventive health services.

The bill also addresses medical liability, calling for new incentive payments to states that have alternative medical liability laws aimed at cracking down on frivolous malpractice lawsuits.

Lawmakers pulled out a provision to reverse a 21% cut to physicians' Medicare payments that's scheduled to take effect next year and introduced it in a separate piece of legislation.

House Leaders Unveil Health Bill

WASHINGTON -- House leaders unveiled their sweeping health bill Thursday, ending months of negotiations to bring together fractious Democrats and setting the stage for the full House to take up the bill next week.